The Minnesota Revenue Department is investigating efforts by some Minnesotans to avoid paying motor vehicle sales taxes by setting up dummy Montana corporations.
“While the majority of Minnesota residents pay taxes when purchasing a vehicle, there is a small group that isn’t paying their share,” Revenue Commissioner Myron Frans said. “We are investigating these tax evasion activities and we will ensure that all Minnesotans follow the rules and pay the taxes that they owe.”
Frans said that Minnesotans must pay the state’s 6.5 sales tax regardless of where they buy the vehicle. Also, the vehicle must be registered in Minnesota.
The Revenue Department reports its Montana investigation is over Minnesotans setting up shell corporations to avoid paying taxes on motor homes that cost from $150,000 to $1 million.
People involved in such a scheme could face felony or gross misdemeanor charges in Minnesota.
The department has collected $230,000 in 22 cases of such tax evasion in the past year.